http://www.denverpost.com/news/ci_28947869/colorad...Colorado monthly marijuana sales eclipse $100 million markColorado recreational marijuana sales are close to $60 million in August 2015; medical marijuana sales climb slightlyLooks like a runaway freight train

My long term goal is to start to build a portfolio of rentals that would eventually eclipse my current income.

One title problem and the legal bills alone will far eclipse the premiums paid for an entire portfolio of properties.

And, of course, you may even find the real estate income can eventually equal or eclipse your day job so you can keep it if you have meaningful work, as mentioned above..or move on...

So think about how it fits your ability to follow the rules...And perhaps the real 800 lb gorilla is legal fees in a lawsuit and the LLC has no duty to defend as mentioned above, so you want the landlord policy and umbrella there for that, so you can afford the legal fight in the first place, and legal fees eclipse the claims over and over these days (the phantom threat is legal fees perhaps as much as liabilities in my opinion, 10K slip and fall 100K legal fees)....And you still may need the landlord policy for the claims related to issues like wrongful eviction, fair housing, etc so you have coverage there and defense costs covered as mentioned above...

There are rules, like 10% , but maybe the exceptions swallow the rule with older rentals....I have a 80's era fourplex and it had some deferred maintenance, so repairs and maintenance eclipsed the 10% mark in early years (previous owners squeezed all the juice from the property).

The only thing I would add is that you can do all of this online in Philadelphia's Eclipse system. 

Step 3:  When the number from step 2 equals or eclipses the number from step 1, you're on the right side of the equation and you are primed for an exit. 

So, once your MAGI eclipses $150,000, you can no longer take any passive loss from real estate.

Passive eclipses JOB incomehappens faster than you realize